The ABLE account is a saving account based on the Achieving a Better Life Experience Act (ABLE Act) that aims to take care of the disabled. Its scope of use is: the recipient’s disability occurs before the age of 26, and the ABLE account should be under the name of that person. Therefore, as long as the recipient became disabled before 26 years old, he/she can set up the account even after 26.

Besides, money deposited in the ABLE account will not be considered as recipient’s property, so it will not cause recipients to lose their eligibility from other social welfare. Regardless of the source of money, the annual maximum amount deposited into the ABLE account should be $15,000 which is federal tax allowance. Exceeding this amount will have bad impact on recipient’s eligibility to continue receiving social welfare. Importantly, one recipient can only have one ABLE account.  

An ABLE account should not exceed $100,000. Within this range, money in the account will not be included into the limitation of SSI (Supplemental Security Income) property (single $2,000; married $3,000). The recipient cannot continue enjoying SSI when the account goes beyond $100,000. In California, the recipient is still qualified for getting Med-Cal and CalFresh, only if his/her account is less than $ 475,000.

The money in the ABLE account can only be used as allowance from welfare, and used for disability-related expenses that defined in tax laws, such as: daily life, education, housing, transportation, employment training, living-assist technology, nursing, financial management, and lawyer etc. At the federal level, the money in the account is after-tax. Nevertheless, all income from the ABLE account is tax-exempt. A few states (not including California) have tax deductions for money saved in ABLE accounts.

If the recipient dies after 55 years old, the government should deduct certain expenses from their estate, such as nursing care, housing arrangements, hospitalization, and medicine. In some cases, the state government can deduct Medicaid expenses from the remaining trust property after the recipient’s death. However, if the deceased’s spouse is still alive, or has disabled children, or has children under 21, the state government has no right to deduct money from the deceased’s trust property.

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